Steady rise predicted for South African gambling

The latest review of South African gambling conducted by professional business services provider PwC predicts that overall GGR will rise from last year’s Rands 27 billion to Rands 35 billion in 2021 – a 5.1 percent compound annual increase.

Gambling taxes and levies, which rose 4.9 percent to Rands 2.7 billion last year, would grow at 5.2 percent compound annual rate to Rands 3.5 billion in 2021, with casinos the biggest contributor with tax payments of Rands 1.8 billion – 66 percent of all taxes and levies.

The industry directly employs 10,000 South Africans, the report reveals.

Bingo is flagged in the report as the fastest growing vertical, accounting for 5 percent of total GGR in 2016, up from 4 percent in 2015, buoyed by a 36.6 percent rise in GGR. The province of Gauteng generated 65 percent of the total growth in bingo GGR, with a 37.6 percent increase to R813 million. The vertical is expected to continue to improve at a CAGR of 11.9 percent to R2.2 billion in 2021.

Lottery ticket sales increased in 2016, leading to lottery GGR rising 34.7 percent to R2.98 billion. National Lottery GGR is forecast to rise at a CAGR of 0.7 percent to Rands 3.08 billion by 2021.

Sports betting rose 21.3 percent in 2016 to Rands 2.9 billion, more than three times the Rands 847 million total recorded four years previous. Sports betting GGR should rise at a CAGR of 12.3 percent to Rands 5.2 billion by 2021.

Horse racing rose 6.2 percent last year and GGR was forecast to increase to Rands 2.3 billion by 2021.

PwC South Africa’s gambling analyst Pietro Calicchio said: “The gambling industry in South Africa will continue to be adversely affected in the near term by slower economic growth, but improving economic conditions over the latter part of the forecast period will aid growth. The industry remains an important contributor to the economy through the creation of jobs, continued capital expansion and the payment of taxes to both provincial and national government.”

However, he noted that illegal gambling had deprived the national GDP of around Rands 1.9 billion in lost revenues last year, denying the creation of a possible 3,785 new jobs.

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